Bone morphogenetic proteins (BMPs) were identified as potent bone forming agents based on their ability to induce de novo bone formation in adult animals and this unique feature of BMP activity has led to use of BMPs as therapeutic agents in bone repair. It has also generated intense interest in defining the role endogenous BMPs play in the skeleton. Removal of individual osteogenic BMPs (BMPs 2, 4, 5, 6, 7) during embryonic development shows that loss of any individual BMP can be compensated for by the other BMPs present. Mice in which combinations of osteogenic BMPs have been removed display a variety of skeletal phenotypes, consistent with idea that individual BMPs work in concert during skeletal development to provide the appropriate levels of BMP activity. BMP activity is also required to maintain normal bone function in adults, and increasing the levels of BMP antagonists in bone leads to osteopenia, bone fragility and spontaneous fracture. Our recent data showing that loss of BMP2 from the limb skeleton leads to pervasive spontaneous fractures in the postnatal mice (Tsuji et al., 2006) identifies BMP2 as a primary participant in skeletal homeostasis in adults. In this proposal, we hypothesize that BMP2 is required for skeletal homeostasis because it has a unique spatial and temporal expression pattern in the postnatal limb skeleton and so cannot be compensated for by other BMPs. We address this hypothesis in three specific aims. In SA 1 we create a mouse in which the BMP2 gene is replaced by a visual reporter, providing a precise way to follow BMP2 expression. In SA 2 we investigate the role of BMP2 in maintaining the bone marrow stromal cell microenvironment that is required to support osteoblast differentiation in the adult skeleton. Loss of BMP2 would be of greater consequence if BMP2 were required for maintenance of the bone marrow stromal microenvironment that allows for osteoblast differentiation. In SA 3 we characterize the requirement for BMP2 in Wnt-mediated osteoblast differentiation. Loss of BMP2 would be of greater consequence if BMP2 were required for optimal Wnt signaling in bone. Completion of the experimental plan will allow us to define the role of BMP2 in bone homeostasis.